An Australian man has been charged with allegedly helping ISIS to develop "high-tech" missile capabilities.

The 42-year-old was taken into custody in the small rural New South Wales town of Young by the Australian Federal Police.

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In a statement, the Australian Federal Police said the man had been researching and designing both a laser warning system to detect incoming Syrian and Iraqi munitions and long-range guided missiles for the terrorist group.

He's facing three charges which, if he's found guilty, carry a maximum penalty of life in prison.

Australian Prime Minister Malcolm Turnbull told reporters Tuesday the arrest highlighted that support for ISIS wasn't limited to Australia's major cities.

"We've seen Australians arrested for preparations to carry out terrorist acts or providing financial assistance to terrorist groups, we've seen Australians travel to the conflict zone to take up arms for (ISIS)," he said.

Turnbull said there had been no attack planned inside Australia.

Australian Federal Police Assistant Commissioner Counter Terrorism Ian McCartney said in a statement the arrest had followed more than 18 months of investigations.

The arrest comes less than two months after a terrorist attack intended for Christmas Day was thwarted in Melbourne, Australia.

Six people were taken into custody for planning to explode "improvised explosive devices" at locations around the city center.